Will the energy Price Cap increase your bills from October 2021?
The energy price cap has increased for the second time this year, hiking up the prices of over 15 million household energy bills.
Disclaimer: The information on this page was last updated on 10/01/2023, 12:10:35
Millions of households across the UK are being urged to switch providers as the energy price cap is set to increase by up to £153 this October.
The Ofgem price cap acts as a safety net for over 15 million customers to make sure that they’re not paying too much for their energy. The cap is reviewed twice a year in line with the wholesale cost of energy to keep prices fair for both providers and consumers.
I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances. - Jonathan Brearly, CEO at Ofgem
Who is affected by the price cap?
There are two groups of people who will be affected by the increase in Ofgem’s price cap: those who are on a Standard Variable Tariff (SVT) and those with prepayment meters.
At the end of your tariff, if you don’t switch, you’ll likely also be on your provider’s Standard Variable Tariff (SVT). This is often their most expensive option as prices can change regularly (usually in line with the Ofgem price cap). The new price cap for customers on SVTs paying by direct debit will increase by £139, bringing the cap to £1,277 per year.
Energy prices for customers with a prepayment meter are often more than those with a credit meter already, and this is set to be even more prevalent with an increase of £153 to the Ofgem price cap. Prepayment customers will see the price cap rise to £1,309 per year, compared to the previous £1,156.
The changes to the price cap will come into effect from the 1st October.
Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic. - Jonathan Brearly
Why is the energy price cap increasing?
Ofgem sets the price cap based on a range of factors, such as the wholesale cost of energy, network costs, policy costs, operating costs, and prepayment meter costs.
In the past six months, the wholesale cost of gas has risen by over 50%, reaching a record high across the whole of Europe. This is due to a recovery in demand after lockdowns and tighter supplies, increasing the cost of heating homes and even pushing up electricity prices.
How to avoid the new changes
To make sure you avoid increased bills due to the increased price cap, the best thing to do is to compare and switch tariffs and providers.
If you switch before the 10th September, you’ll be able to completely avoid the effects of the energy price cap changes. This is because the switching process takes around 3 weeks to complete so your switch will be finalised before the price cap increase comes into effect.
For help switching tariffs and providers, give Utility Switchboard a call on
How much you could save
Whether you’re simply changing tariffs or switching providers, you could save massively when you move from a Standard Variable or prepayment tariff and avoid the Ofgem price cap.
Take a look at some of the savings you could make below.
| Provider | Fixed tariff price per month | Saving per year |
|---|---|---|
| EON | £95.42pm | £132 saving |
| Octopus Energy | £94.42pm | £144 saving |
| Together Energy | £97.75pm | £104 saving |
| EDF Energy | £100pm | £77 saving |
| Shell Energy | £97.17pm | £111 saving |
*Prices based on a London postcode paying by direct debit using 3,100kWh electricity and 12,500kWh gas per year
The subject matter of this webpage is subject to the opinion of, and factual research carried out by, the author. We always strive to provide the most up to date, correct and informative information in all of our webpages, but from time to time, you may spot an error or something you don't agree with. Please report this to us at info@utilityswitchboard.com
Any products or services displayed on this webpage may only represent a portion of the options available to you. We encourage you to carry out your own independent research and seek advice where necessary to aid your decision making. We may receive a commission from selected partnered companies for the introduction of potential customers and business mentioned on this website. This helps us to provide our website to you for free as a customer.
Utility Switchboard is a free service provider of UK utility-industry advice and price comparison.
Follow us on socials
All rights reserved - © 2022